Patrick Austin, J.D. | September 18, 2023
Edited by Hannah Locklear
Summary: Nebraska has multiple state laws, including the Nebraska Consumer Protection Act, to safeguard consumers from unscrupulous debt collectors and limit loan interest rates to 16%; these are complemented by federal protections like the FDCPA and a five-year statute of limitations for most consumer debt legal actions.
Experiencing numerous phone calls, menacing letters, and various intimidation tactics from an overzealous debt collector can be distressing. However, if you're facing harassment from a debt collection agent in Nebraska, rest assured. Both state and federal laws are in place to safeguard you during interactions with debt collectors.
This article provides a comprehensive overview of debt collection laws in Nebraska, including laws pertaining to the statute of limitations.
Nebraska has multiple laws addressing different aspects of debt collection. For example, the Cornhusker State has a law governing the licensing requirements for debt collection agencies, specifically Neb. Rev. Stat. §§45-601 to 45-623. This state law requires debt collectors to be licensed in order to engage in any collection work in the state.
There is also the Nebraska Consumer Protection Act (NCPA). The NCPA is a state law that provides additional protections for Nebraska consumers. It prohibits debt collectors from engaging in deceptive trade practices, including false representations and unfair practices. If a debt collector violates the NCPA, debtors may be entitled to damages and other remedies.
On top of these laws, there is a state law governing lenders, specifically Neb. Rev. Stat. §45-1043 to §45-1058 (“Nebraska Installment Loan Act” or “NILA”). The Nebraska Installment Loan Act contains provisions limiting a creditor’s communications with consumers and third parties. This state law prohibits certain specified abusive and harassing practices mirroring the legal protections in the federal Fair Debt Collection Practices Act (more on this law below). Let’s get into the specifics.
According to Neb. Rev. Stat. §45-1047(2), lenders in Nebraska cannot do any of the following when collecting money:
If a Nebraska resident has evidence of a debt collector violating these laws, they may be able to obtain compensatory damages and liquidated damages of $500 to $1000, along with reimbursement for attorney’s fees and costs, through the filing of a civil action against the debt collector.
Nebraska also has specific laws regarding the maximum interest rates that can be charged on certain types of debt. For example, the maximum interest rate on consumer loans is set at 16% per year. If a creditor charges an interest rate higher than the legal limit, it may be considered usury and may result in the debt being uncollectible.
Another Nebraska-specific law that helps protect consumers struggling with debt are garnishment laws. Specifically, there are Nebraska laws that limit and exempt a portion of your wages from garnishment to help ensure you have an adequate amount of income to support themselves and their families. Understanding garnishment laws can help debtors protect their income and assets from excessive collection efforts.
In addition to Nebraska state law, there are federal protections afforded to consumers under the Fair Debt Collection Practices Act (FDCPA). Specifically, the FDCPA sets guidelines for debt collectors and protects debtors from abusive, harassing, and unfair debt collection practices. It prohibits debt collectors from using threats, deception, or misleading statements, and restricts the time and methods of debt collection communication.
Learn more here: What Debt Collectors Cannot Do — FDCPA Explained
In addition to the legal protections and rights afforded to Nebraska residents under state law, the federal FDCPA, and the federal FCRA, another important statutory regime applicable to debt collection is the statute of limitations placed on debt.
For context, the statute of limitations is a specific period of time, typically established by a state legislature, that governs how long something can serve as the basis for a civil claim (e.g., breach of contract, personal injury, collection efforts on a debt, and so forth). The statute of limitations for debt is different in each state, including Nebraska.
The statute of limitations for most types of consumer debt (e.g., credit card debt, auto loan debt, etc.) is five years from the last payment made. This means a debt collection agent or agency could have their debt collection lawsuit tossed out of court after five years have elapsed since any payment was made on the delinquent account. Though, if an agreement was verbal in nature, then the statute of limitations is only four years in Nebraska.
The table below outlines the statute of limitations on different types of debt in Nebraska:
|Oral contracts||4 years|
|Credit card||5 years|
|Student loan||5 years|
|Auto loan||5 years|
|Personal loan||5 years|
|Source: Neb. Rev. Stat. §25-205, §25-206, and §25-1515|
Debt collection laws in Nebraska, and federal laws like the FDCPA, are available to help level the playing field when a consumer is being hounded by an unscrupulous debt collector. Here are some key takeaways on this article on debt collection laws in Nebraska:
If you’ve been sued for a debt in Nebraska, respond to the case with SoloSuit’s Debt Answer form and increase your chances of winning.
Debt collectors and creditors have the right to take legal action if you refuse to communicate with them about your debt. However, that doesn’t mean that all debt lawsuits have merit. Luckily, SoloSuit was created with this in mind.
SoloSuit can help you respond to a debt lawsuit in Nebraska, stand up for your rights, and buy yourself time to work out a debt settlement plan. The surest way to get debt collectors off your back is by paying what you owe. And if you go about this wisely, you can usually settle your debt for less than you originally owed.
In a debt settlement, you offer your creditor a portion of the total amount due, usually at least 60% of the debt’s value. In exchange for a lump-sum payment, the creditor agrees to drop its legal claims against you and release you from the remaining balance.
If you decide to settle your obligation, you’ll want to ensure you get the terms of your agreement in writing and pay the creditor before your court date. If you’ve never tried debt settlement before, consider working with a professional organization that will guide you through the process.
To learn more about how to settle a debt in Nebraska, check out this video:
SoloSettle, powered by SoloSuit, is a tech-based approach to debt settlement. Our software helps you send and receive settlement offers until you reach an agreement with the collector. Once an agreement is reached, we’ll help you manage the settlement documentation and transfer your payment to the creditor or debt collector, helping you keep your financial information private and secure.
Read also: How to Settle a Debt in Nebraska
SoloSuit makes it easy to fight debt collectors.
You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.
SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.
Here's a list of guides for other states.
Being sued by a different debt collector? Were making guides on how to beat each one.
You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now are are just look for support, we're here for you.
Is your credit card company suing you? Learn how you can beat each one.
Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.
Out Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it.
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